Suspended and Unlicensed VA Physicians Receive Pay Bonuses

By Eric Katz

August 23, 2013

Doctors working for the Veterans Affairs department received performance-based bonuses despite providing poor treatment, according to a new report, due to a lack of agencywide standards defining the prerequisites for the monetary awards.

In fiscal 2011, about 80 percent of Veterans Health Administration providers -- physicians and dentists -- received $150 million in incentivized pay, according to a Government Accountability Office audit. These employees are eligible to collect up to $15,000 or 7.5 percent of their base pay in an annual lump sum. Additionally, about 20 percent of providers received $10 million in performance awards.

VA, however, has failed to provide the “overarching purpose” behind the payments, leaving each medical facility to make its own determinations. This has led to lax oversight of what qualifies the providers to receive the bonuses. Every physician in GAO's random 2010 and 2011 samples who was eligible to receive performance pay received it, even in cases where their actual performance was problematic.

One physician practiced with an expired license for three months, but still received more than $7,600 in performance pay -- despite being “reprimanded” by his employer -- because having a current license was “not a factor that was considered” in determining whether to make the payment. Another provider repeatedly refused to see patients in the emergency room because he believed they were falsely admitted. That doctor failed on 12 of his 13 performance goals, but still received more than $7,500 in performance pay.

GAO found one VHA radiologist “failed to read mammograms and other complex images competently,” but still received more than $8,000 in incentivized pay. A VHA surgeon left a surgery during the procedure and allowed his residents to continue unsupervised. The doctor was suspended for 14 days without pay, but still received more than $11,000 in performance pay.

Yet another physician received a three-day suspension for not responding when on call and creating “an atmosphere of fear and poor morale” through outbursts of yelling. The doctor received a performance payment of more than $10,000.

“While VHA strives to provide high-quality and safe care to veterans, concerns continue to surface about the quality of care it delivers,” GAO wrote in its report. “Meanwhile, many providers continue to receive compensation that is tied directly to their performance.”

To fix these improper payments, GAO recommended VA clarify the purpose of the incentive system, as well as its oversight of compliance with the goals providers need to reach to earn their performance payments. VA generally agreed with GAO’s findings and said it would take the recommended steps to improve the payment system.